Ripple volition be sued by the United states of america Security and Substitution Commission for allegedly selling unlicensed securities in the form of XRP tokens, according to Fortune.

In a move reminiscent of Coinbase's contempo front end-running of a New York Times betrayal of its declared treatment of employees of colour, Ripple CEO Brad Garlinghouse has taken the unusual step of posting to Twitter to seemingly legislate the consequence in the courtroom of public opinion.

Bitcoin (BTC) and Ether (ETH) take both escaped SEC enforcement due to their decentralized nature. However, XRP, the token associated with Ripple, has long been criticized by some members of the crypto community equally highly centralized. Ripple has maintained an escrow account of around 50 billion XRP, or effectually half of the total supply, which the company's chief technical officer David Schwartz claims to have been "gifted" past the creators of the third-largest cryptocurrency.

Despite class-activeness lawsuits and acrimonious splits between the original founders, Ripple has survived to go 1 of the fintech manufacture'due south richest companies, with a reserve — primarily held in XRP — that could theoretically be worth almost $25 billion, even after a dramatic 13.5% drib in the price of the cryptocurrency token following the news of the potential lawsuit.

A source with connections to Ripple told Cointelegraph:

"There'due south no style information technology [XRP] is non a security."

Ripple posted a Wells submission document to its website explaining its position, claiming, "By alleging that Ripple'southward distributions of XRP are investment contracts while maintaining that bitcoin and ether are not securities, the Commission is picking virtual currency winners and losers, destroying U.S.-based, consumer-friendly innovation in the process."

The company continued to allege, without evidence, that Bitcoin and Ether are "two Chinese-controlled virtual currencies that the SEC has stated are not securities," and that "innovation in the cryptocurrency manufacture volition be fully ceded to China" should the potential lawsuit brought by the SEC be successful.

According to Fortune, both Garlinghouse and co-founder Chris Larsen, whose combined wealth is estimated at $xiii billion, are expected to exist named every bit defendants in the possible lawsuit.

Although Garlinghouse has stated that Ripple would proceed to thrive even with a security designation for XRP, the company has recently claimed to exist seeking new headquarters outside of the U.s.a., claiming that a lack of regulatory clarity was forcing its hand.

Cointelegraph reached out to Ripple for comment on whether Larsen and Garlinghouse would stay in the United States in lite of the potential lawsuit, and had non received a response at the time of publication.